The progressive wage model (PWM) will be extended to the retail, food services and waste management sectors, so as to provide more help for lower-wage workers.
Speaking at the Budget 2022, Finance Minister Lawrence Wong said this also includes in-house cleaners, in-house security officers, in-house landscape workers, administrators and drivers across all sectors.
Simply put, the PWM sets out minimum pay and training requirements for workers at different skill levels.
Wong said from September 2022, companies under the PWM employing foreign workers will also need to pay all local employees at least the local qualifying salary, which stands at $1,400 a month.
In addition, a Progressive Wage Mark will be launched to accredit firms that pay progressive wages and the local qualifying salary.
This mark will be required for suppliers who wish to be contracted by the government from March 2023.
Wong said he understood that companies may need time to adjust to the changes, and as such, the government will launch a new Progressive Wage Credit Scheme to provide “transitional support” for businesses.
Under the PWCS, the government will co-fund 50% of pay increases made this year and next year.
This will decrease to 30% of pay increases in 2024 and 2025, and finally 15 per cent of pay increases in 2026.
These will apply to Singaporeans and permanent residents earning a gross wage of up to $2,500 a month.
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For workers earning between $2,500 and $3,000, there is a lower co-funding rate of 30% for wage increases for 2022 and 2023, and then 15% for increases in 2024.
“With this, the government will be cost sharing with employers a significant portion of the cost increase,” Wong said, adding that it will set up a PWCS fund with $2 billion, so as to provide certainty of funding for the wage increases over the next five years.
Source: MOF
Workfare extended to younger workers, higher payouts
Separately, Wong announced that the Workfare Income Supplement will also be enhanced for low-wage workers.
From Jan 1, 2023, the qualifying income cap will be raised from the current $2,300 to $2,500 per month.
A minimum income criterion for Workfare at S$500 per month will be introduced, so as to encourage part-timers and casual workers to take up regular full time work.
Workfare will be extended to younger workers aged 30 to 34, and they will receive a maximum payout of $2,100.
Those 35 to 44 years old will receive a maximum annual payout of $3,000, while those aged 45 to 59 will receive a maximum payout of $3,600.
Those aged 60 and above, as well as workers with disabilities, will receive the highest maximum payout tier of $4,200 annually.
Source: MOF
